CA Creates Tougher Refinery Safety Rules

Wednesday, August 16, 2017 @ 02:08 PM gHale

California oil refinery operators including Chevron Corp., Andeavor Inc., and Valero, could spend about $58 million during the next year to comply with the state’s new refinery safety rules, state officials said. 

The new safety rules, published by the state’s Office of Administrative Law Aug. 4 and take effect Oct. 1, require refinery operators to make changes to better anticipate and prevent major accidents such as the 2012 Chevron refinery fire in Richmond, CA.

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That incident prompted the regulatory overhaul. The fire injured six workers and caused an estimated 15,000 residents to seek medical care as a result of heavy smoke in the air.

Chevron, which operates two of the state’s three largest refineries by volume, also is required to make safety changes under the terms of a settlement with California’s Division of Occupational Safety and Health, released July 24. 

The state found in a regulatory impact assessment completed in 2016 the regulation would create 158 jobs and cost companies $58 million during its first year.

The regulations would pay for themselves if they reduced the risk of a “costly major incident” at a refinery by 7.3 percent, according to the assessment. The state defined a major incident as one causing at least $800 million in damage to California’s economy.

A dozen companies operate California’s oil refineries, according to the California Energy Commission. The companies are Chevron, Tesoro (now known as Andeavor), Shell, PBF Energy, Valero Energy, Phillips 66, Paramount Petroleum Corp., Delek US, Kern Oil & Refining Co., San Joaquin Refining Co. Inc., Greka Energy, and Lunday Thagard.

David Lanier, secretary of California’s Labor and Workforce Development Agency, the changes mean California “leads the nation in protecting the safety and health of refinery workers and people in nearby communities.”

The rules, which are stricter than federal requirements, require companies to review equipment and material degradation, and to evaluate staffing and training. Some refineries already perform these tasks, state officials have said, though others do not, posing safety risks for workers and disrupting the state’s economy if fuel prices spike during a refinery outage.

Click here to download the new rules.

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